Thor Bjorgolfsson, biker, self-confessed deal addict, “adventure capitalist” and once Iceland’s most bankable billionaire, does not like to lose control — of himself, his businesses or his friends.
This is the man who denied alcohol to 120 guests when he flew them to his 40th birthday party so they would not peak too soon and spoil the party. Now 48, he admits he is still prone to taking charge “if I think people can’t control themselves”.
He cultivates an easy-going look. He obeys the photographer as a model would, and with a smile. But control, and loss of control, is a recurring theme in his book: Billions to Bust — and Back, about how he made and lost a pan-European $4bn telecoms-to-banking empire in 2008.
The book — written, he admits, on the fly as “a big yellow Post-it note” to warn him not to let things get out of hand again — starts with a confession: “My name is Bjorgolfur Thor Bjorgolfsson and I’m a deal junkie.” It ends on his bitterness at the Icelandic government, which he claims needlessly snatched control of the island’s banks in 2008 and ducked the blame for Iceland’s uncontrolled expansion and subsequent crash.
The book is an exercise in self-justification as well as an advertisement that Mr Bjorgolfsson is back in charge, having spent the past seven years at the beck and call of bankers and creditors’ committees, and repaying €650m of debt that he had personally guaranteed.
It has been a frustrating period of abstinence for the dealoholic, working within the constraints of creditor workouts while his instincts urged him to “break up, spin off and then look for a transformational deal”, he says.
Instead he had to sell the yacht, the jet and what businesses he could. All he kept were the bikes, an “old” Aston Martin, and his stakes in Play, the Polish telecoms operator he set up in 2005, and Actavis, the drug business he took private in 2006.
It might have been easier to declare himself bankrupt. “But that would have been the ‘quit’ option, which would have meant . . . surrendering to the banks, the creditors and the strategists aiming to bring me down.”
Today Mr Bjorgolfsson’s remaining 1 per cent in Actavis — sold to Watson Pharmaceuticals in 2012 — is worth more than $1bn, giving him the wherewithal to go deal hunting.
He plans to return to Russia, where he made his first $100m. He is pursuing deals “in the sectors I’ve succeeded in — telecoms or pharmaceuticals”, he says. Not banks then.
The collapse of the rouble and the Ukraine crisis “makes Russia the perfect opportunity in my cookbook”, he says, adding that the best deals come from picking off “damaged companies in great countries or great companies in damaged countries”.
That said, Russia has changed since he was last there and so has he. Now he lives in west London. His office is a glass-and-steel penthouse with blue velvet sofas overlooking Hyde Park. He wears sculpted suits and works out regularly in the gym “because it teaches self-discipline and pushes one to the limit”.
His appetite for risk is not what it was now that he has a wife and three small children. “Entrepreneurs need to spot opportunities and go all the way. If you are timid, falter or have self-doubts you won’t get there,” he says. “In youth you go further.”
Back in the 1990s Russia was wild and going through “one of the fastest and most significant transfers of wealth in human history”. The police and judicial systems were unreliable and to survive, let alone prosper, businessmen had to pay for unofficial protection called krysha, Russian for “roof”.
Then he was a 20-something vegetarian, living in self-imposed exile from Iceland in a shabby apartment in St Petersburg. He partied hard with expats on vodka and his motto was: “Never have anything in your life that you’re not ready to walk out on at five minutes’ notice.”
First Mr Bjorgolfsson built a bottling factory. Then he made alcopops and borrowed $25m to start a brewery. He nearly lost it all when Russia devalued its currency in 1998, leaving him with assets valued in roubles and debt in dollars. But in 2002 he managed to sell the brewery to Heineken for $350m.
From there he expanded into eastern Europe and returned to Iceland. Now he describes going back to Reykjavik as his biggest mistake. Then, however, he was lionised as Iceland’s first billionaire.
He claims he allowed himself to be “seduced”, although that underplays his influence and active role in the Icelandic economy at the time. “It was so easy to make money in Iceland. I thought I’ll take a piece.”
The island economy was being transformed by deregulation and privatisation. Credit was easy, the stock market was booming. He bought close to half of Landsbanki, one of Iceland’s top three banks. In 2006 he borrowed €4bn and paid €5.3bn to take Actavis private. By 2008, Mr Bjorgolfsson reckons he owed about $10bn and was the single biggest investor in Iceland’s banking system.
A government-backed report into the ensuing crash examined how the island’s banks had been weakened by a system that enabled their biggest shareholders to be their biggest debtors.
“I knew it was risky. But it was like chocolate cake or a drink at a party. You know you shouldn’t but you have it anyway . . . I forgot the key lessons of temperance and self-discipline.”
Today, he says, he sees risks everywhere, chastened by his “near-death experience”. When the UK tried to force the Icelandic people to foot the compensation bill for depositors in Icesave,
Landsbanki’s UK subsidiary, his compatriots pilloried him and paint-bombed his house.
He says he was accused unfairly of using the bank “to set up some kind of Ponzi scheme to enrich myself”. There was particular criticism of a loan he secured from Landsbanki amid all the turbulence of 2008 to rescue Actavis — the company that is now the basis of his revived fortunes.
A public apology in Iceland’s national paper did not clear the air. “I hoped to change the discourse. But no one was listening.”
There are Icelanders “richer after the 2008 crash than when they started”, he complains. People who benefited from the boom “should face up to the consequences. As the biggest individual loser in Iceland’s meltdown, I have done so.”
Today Reykjavik is quietly booming again. Some of those Icelandic dealmakers are in court and potentially face jail but Mr Bjorgolfsson claims he is high-fived in the streets and courted by international lenders once more. This time, however, he promises to calculate risks properly and avoid excessive borrowing. “I’ve got leverage out of my system today.”
And then his eyes gleam. “But I am not sure about tomorrow . . . It is a factual conundrum that history has a way of repeating itself.”
Second opinion: ‘Not easily forgotten’
Armann Thorvaldsson, former chief executive of the UK arm of rival bank Kaupthing, wrote in his book Frozen Assets: “Bjorgolfur Thor Bjorgolfsson was someone you don’t easily forget. I had met him years ago, at a friend’s birthday party. I’d just seen him listed in a bizarre tabloid survey as one of Reykjavik’s best lovers.
“His rare self-confidence made him stand out. He was immensely physically strong and bench-pressed over 450 pounds. He was an entrepreneur from early on, and by the age of 11 he was delivering newspapers in the early hours of the morning.
“A year later he was a delivery boy at the University of Iceland and at 13 was running his own home video delivery service. While still at high school, he was running a nightclub in Reykjavik and organised the first Oktoberfest beer festival in Iceland.
“After high school, he studied business in New York. Fluent in several languages, and with an unusual ability to both blend in and stand out, he embodied Iceland’s internationalism.”
Culled from FT
